Court Grants in Part RBS Motion for Summary Judgment in Repurchase Action

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On July 23, Judge William Conley of the Western District of Wisconsin granted in part and denied in part RBS Securities Inc.’s motion for summary judgment in a suit brought by CUNA Mutual Group seeking to rescind the purchase of fifteen RMBS certificates. Judge Conley granted RBS’s motion for summary judgment as to nine of the fifteen RMBS certificates on the ground that CUNA Mutual’s claims were time-barred by Wisconsin’s six-year statute of limitations. He also granted summary judgment to RBS in connection with CUNA Mutual’s allegations of misrepresentations concerning compliance with underwriting guidelines, finding that CUNA Mutual presented insufficient evidence to allow a trier of fact to conclude that it actually relied on any of those representations. Judge Conley similarly granted summary judgment to RBS in connection with CUNA Mutual’s allegations of misrepresentations concerning owner occupancy status, finding that CUNA Mutual had not submitted adequate evidence of any misstatement by RBS of the owner occupancy ratios, which were based on occupancy information provided by the borrowers. As to the six certificates remaining in the lawsuit, CUNA Mutual is allowed to proceed on its claim for rescission based on allegations that RBS misrepresented the LTV and CLTV ratios of the collateral pools. Finally, Judge Conley denied a series of discovery and sanctions motions raised by both parties. The case is scheduled to proceed to trial on August 4. Order.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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